Case Law Details
Murthy Engineering Works Vs Commissioner of Central Excise (CESTAT Ahmedabad)
Main charge against the appellant for denial of exemption notifications which provide abatement from the gross value is that appellant have not included the value of materials provided by the service recipient. This issue now is no longer res-integra as in the various judgments including the judgment of Bhayana Builders (P) Limited (supra), the Tribunal has held that for availing abatement under notifications 19/2003-ST dated 21.08.2003, 15/2004-ST dated 10.09.2004 and Notification No. 1/2006-ST dated 01.03.2006, the value of the material provided by the service recipient to the service provider shall not be included in the gross value for the purpose of charging service tax.
In the above judgment it was categorically held that as per Section 67 of Finance Act, 1994 only that value which is charged by the service provider to the service recipient shall be considered the gross value. Value of the material supplied by the service recipient since not charged by the service provider, cannot be included in the gross value of the service. In view of the settled legal position by the Apex Court, charge of the department clearly fails and on that basis exemption cannot be denied.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The appellant is engaged in providing service of Fabrication, Erection, Commissioning and Installation services, Maintenance Service etc. and for some time rented their Hydra Crane. They are engaged in fabrication of storage tanks, pipe line works, fabrication of shed/ godown/ structure etc. They are registered with service tax department under the category of Construction Service. As per the nature of activity, their work was to fabricate above mentioned items after receipt of raw material namely, steel plates, angles, pipes etc. from their customers. They usually did not provide any kind of raw materials from their side. They also used some materials/ goods i.e. nut-bolts, gas, welding electrodes for fabrication. They generated bills to the customers entirely for the labour charges which did not include either the value of raw materials supplied by the customers or the items used by them for fabrication of desired works in other words their bill contains only the labour charges as per verbal/ written agreement/ contract between them and their customers. They paid service tax after claiming abatement from the gross amount charged under Notification Nos. 19/2003-ST dated 21.08.2003, 15/2004-ST dated 10.09.2004 and Notification No. 1/2006-ST dated 01.03.2006 for the period 2005-06 to 2009-10 (upto September 2009). The case of the department is that :
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